# just being dumb now

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Registered Posts: 734 Epic contributor 🐘
i want to say 1000 adverse but its not an option

A product standard material use is 2kg per unit. The standard price is £2.50 per kg.

In January 53000 kg were used at a cost of £136,000. 27,000 units were produced.

What is the materials usage variance

2,500 Favourable
4,000 Favourable

i done (2x27000)-53000

• Registered Posts: 38 Regular contributor ⭐
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I got 2,500 FAV.

Actual quantity x standard price
53,000 x £2.50 = 132,500

Standard quantity (of actual output) x standard price
54,000 x £2.50 = 135,000

= 2,500 i think...
• Registered Posts: 585 Epic contributor 🐘
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Primble wrote: »

A product standard material use is 2kg per unit. The standard price is £2.50 per kg.

In January 53000 kg were used at a cost of £136,000. 27,000 units were produced.

What is the materials usage variance

aimeexox is correct

Understand EXPECTED usage and; ACTUAL usage

Expected materaial usage for 27000 units is (27000 x 2kg) = 54,000 Kg
Actual material usage to produce 27,000 units is..............= 53,000 Kg

Because we used less material then expected; the varience = FAVOURABLE. (This automatically eliminates 2 adverse answers)
Primble wrote: »

2,500 Favourable
4,000 Favourable

the calculation is (54,000 -53,000) x £2.50 = £2,500 FAVOURABLE

• Registered Posts: 82 Regular contributor ⭐
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Keep these questions coming, lol. They good Practice!!!! Im dreading my MAC exam next month
• Registered Posts: 347 Dedicated contributor 🦉
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HI

I agree with you Stuartander. I am finding MAC horrible. DFS was a breeze compaired to MAC - it just doesnt click with me for some reason.
• Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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ME THREE but we keep practising, MAC has to be the most difficult as yet (which you would expect) and cant even remember anything we did in ecr
• Registered Posts: 734 Epic contributor 🐘
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Oh i got confused because it didn't say anything about price variance so ignored the price
• Registered Posts: 1,326 Beyond epic contributor 🧙‍♂️
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A-Vic wrote: »
ME THREE but we keep practising, MAC has to be the most difficult as yet (which you would expect) and cant even remember anything we did in ecr

I'm exactly the same - can't remember a thing about ECR as I did it sooooo long ago.

My worry about that is when I took ECR I remember reading posts from peeps who took PEV/PCR saying that they had thrown elements of ECR into the PEV/PCR exams. I also remember Steve or Sandy posted that it was reasonable to assume that students should still have this knowledge!!! HA - I WISH!
FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
• Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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Primble wrote: »
i want to say 1000 adverse but its not an option

A product standard material use is 2kg per unit. The standard price is £2.50 per kg.

In January 53000 kg were used at a cost of £136,000. 27,000 units were produced.

What is the materials usage variance

2,500 Favourable
4,000 Favourable

i done (2x27000)-53000

I didn't read the question properly, as usual.....

Total price & usage variance is -1000

but material variance alone is 2500 fav. Always stick to the std cost when working that out.
• Registered Posts: 585 Epic contributor 🐘
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PGM wrote: »

Total price & usage variance is -1000

but material variance alone is 2500 fav.

Therefore the price varience must be 3500 ADVERSE

Calaulations to prove that

£136000 divideby 53000kg = £2.56604 per kg

Autual price paid ....= £2.56604
Expected price to pay £2.50

Actual price is greater then expected pricetherefore varience has to be ADVERSE

(2.56604 - 2.50) x 53000 = 3500 ADVERSE
• Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
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no I got it to about -1000 in total

The price is advert but material usage is favourable.
• Registered Posts: 585 Epic contributor 🐘
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PGM wrote: »
no I got it to about -1000 in total

Can you please explain /show your calculations on how you got -1000?
• Registered Posts: 466 Dedicated contributor 🦉
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Hello,,

Material Usage:

Std 27,000 X 2 = 54,000Kgs x £ 2.50 = 135,000
Act ...................53,000Kgs x £ 2.50 = 132,500
Variance = 2,500 (F)

Material Price:

Std 53,000Kgs X £ 2.50 = 132,500
Act........................... = 136,000
Variance = 3,500 (A)

Total Material Vairance = £ 1,000 (A)

Hope this helps.